Related’s New Debt Focus

Related Cos.’ Related Fund Management wants to differentiate itself from its competitors.
Brian Sedrish, Related Cos.

Brian Sedrish, Related Cos.

Related Cos.’ Related Fund Management, acting through its real estate credit platform, has just announced the completion of financing on four debt investments in four multi-family and condominium assets in leading U.S. cities. The three loans and single preferred equity investment total $217.9 million.

It’s a notable amount of activity within a short timeframe, but RFM has its goals. “As the credit markets have tightened further, RFM’s focus has been, and continues to be on finding ways to differentiate ourselves from our competitors and exploiting the significant financing gaps in the residential and commercial real estate markets nationwide,” Brian Sedrish, a managing director of Related Fund Management and portfolio manager for the firm’s credit platform, told Commercial Property Executive.

RFM provided a $16.5 million mezzanine loan that will help erect a 310-unit apartment tower in Chicago’s River North area, and another mezzanine loan totaling $29.4 million as part of the development of a 398-residence multi-family project in Los Angeles’ trendy Koreatown neighborhood. The firm’s largest commitment in this recent round of investments is a $142 million preferred equity investment in the $600 million acquisition and renovation of a 5,000-unit multi-family portfolio, located in key cities in Florida, Georgia, North Carolina and Texas.

And RFM’s latest activities extended beyond the apartment sub-sector of the multi-family arena. The firm also provided a $30 million mezzanine loan for a high-rise condominium project that will yield 82 luxury residences in Philadelphia’s Fitler Square neighborhood.

“Multi-family and for-sale residential are product types which we possess a great depth of knowledge in and expect they will be asset types that we will continue to lend heavily on,” said Sedrish.

However, RFM is hardly limiting itself to a single sector–or country, for that matter. Sedrish added, “Of course, we will focus our attention on alternative asset classes–retail, hotel, office, specialty use–as opportunities present themselves. In addition, with Related’s recent initiatives in London, the credit business is now actively seeking transaction in select European markets.”